Packaged foods annual spend set to rise 32 %

Apex business body Assocham on Thursday said the rate of annual spending on packaged food, that increased by 22.5 per cent annually between 2010 and 2015, is expected to touch 32 per cent by 2017.

The rise in spending was due to increase in income levels, standard of living, greater confidence in packaged food, convenience and influence of the western world, according to an Assocham survey.

About 76 per cent of parents, mostly both working, with children under five years, in the big cities, are serving these easy-to-prepare meals at least 10-12 times per month due to increased pressures at work and looking for ways to simplify and save time, said DS Rawat, Secretary-General, the Associated Chambers of Commerce and Industries, said, adding the consumption of packaged food is much higher in the urban areas, especially metros, where life is fast-paced and stressful.

The Assocham Health Committee Council, which conducted the survey on “Steep rise in packaged food consumption in India”, based its findings on the responses from 2,200 representative households with or without children, nuclear families and bachelors.

BK Rao, Chairman of the Assocham body, said, “Packaged food usually contains high level of salt, thus leading to rise in blood pressure. Such items are also high in trans-fats, which are worse than saturated fats as they increase bad cholesterol and reduce good cholesterol.”

Respondents in major metropolitan cities where the survey was conducted observed that the rise in the demand of packaged food was due to changing lifestyle and eating habits. About 89.5 per cent of the nuclear families feel they have have less time to spend in the kitchen. It is in this background that home delivery business model for cooked food has grown multi-fold.

Nearly 72.6 per cent of bachelors prefer the convenience food because of less cost, time and energy saving, convenience in consumption in their busy and hectic lives. The very term ‘instant’ means simple, fast, convenient and affordable food which is easy and fast to prepare besides being hygienic, free from microbial contamination and also convenient to eat, say the bachelors.

The main categories of packaged food are bakery products, canned/dried processed food, frozen processed food, ready-to-eat meals, dairy products, diet snacks, processed meat and health products and drinks. Food manufacturers have also started concentrating on manufacturing new innovative food products and ready-to-eat processed food so that it can keep up with the speed of the ever changing taste of consumers.

There has been a major shift in food habits in the metropolitan cities. About 79 per cent of households prefer to have instant food due to steep rise in dual income level and standard of living and convenience.

The current size of the Indian packaged food industry is about $30 billion and likely to touch $50 billion by 2017, growing at a compound annual growth rate (CAGR) of about 30 per cent.

There is a large divide between urban, semi-urban and rural consumers in India. The share of urban residents is about 80 per cent of all packaged food, while semi-urban and rural residents consumed just over 40 per cent and 22 per cent respectively.